#1 electric vehicle, solar, & battery news + analysis site in the world. Support our work today.

Fossil Fuels no image

Published on September 25th, 2013 | by Tina Casey


Gadzooks! AEI Hates On Oil, Agrees With Obama About Everything!

September 25th, 2013 by  

File this one under Even A Broken Clock Is Right Twice A Day. The American Enterprise Institute, which has never exactly been BFFs with alternative fuels and electric vehicles, is promoting a new report that blames oil dependency for dragging down the national economy. The report goes on to position President Obama’s alternative fuel, electric vehicle, and fuel efficiency policies as economically rational responses to transition the US out of reliance on the volatile global oil market.

When we last checked in on AEI, the conservative think tank was calling subsidies for electric vehicles a “devil’s bargain” and promoting a book based on the claim that the installed cost of solar energy has jumped up since 2001 when it has actually tumbled down, so we’re not endorsing AEI’s methodology or its conclusions. We’re just interested in, well, why are they hating on oil all of a sudden?

The AEI Petroleum Dependency Report

Sparingly titled “Oil and the Debt,” the focus of the report is on making the case against the “drill, baby, drill” approach to federal energy policy. The critical factor is that the report covers oil dependency, period, not just dependency on imported oil.

AEI report, "Oil and the Debt."

EV charging station (cropped) by MR38.

Before we jump into the report, keep in mind that while the title refers to the national debt, the text refers to federal deficits. That’s a bit confusing but our good friends at the Treasury Department Bureau of the Public Debt suggest that if you think of the debt as accumulated deficits, you’re on the right track.

Here’s the money quote:

…the negative impacts of high and volatile oil prices for households, businesses, and public agencies would remain largely unaddressed by an energy strategy focused strictly on increasing domestic oil production. For example, while increased domestic supply would put some downward pressure on oil prices, the changes would likely be small, because oil prices are determined in a global market.

If that sounds familiar, it’s the same economic rationale underlying President Obama’s energy initiatives: the petroleum market is global.

The report also engages in a nifty bit of water-carrying for the President’s global warming and public health policies by noting that “petroleum is both more carbon-intensive and poses a greater risk to local environments than many alternative energy sources.”

To cap it off, the report refers supportively to  another analysis that positions “a transfer of wealth to oil exporters” as one of three key ways in which dependency on the global petroleum market imposes costs on the US economy, along with a “deadweight” loss of GDP from higher prices and losses resulting from disruptive price spikes.

Why Does AEI Hate Oil?

The report is primarily geared toward oil dependency in the transportation sector and it includes a section running down the various alternatives. In other words, it ends up describing and supporting President’s initiatives straight down the line: fuel efficiency, biofuels, electrification, and natural gas. Especially natural gas.

That last item is where you might find a hint about why AEI would promote a report that shoots down petroleum. Although ExxonMobil is among AEI’s major funders, you’ll also find the industrialist Koch brothers deeply embedded in the mix, and it seems to us that the Koch brothers have been busily hedging their bets when it comes to natural gas and climate science.

Come to think of it, ExxonMobil is no slouch when it comes to shale gas, either.

Given that President Obama is still strongly supportive of natural gas as a cleaner fuel (though we politely disagree, to say the least), we’re guessing that’s why AEI has suddenly become such a total fanboy of his energy policies, even if the report never mentions him by name.

What’s your guess?

Follow me on Twitter and Google+.

[correction: an earlier version of this post stated that AEI “issued” the report] 

Follow CleanTechnica on Google News.
It will make you happy & help you live in peace for the rest of your life.

Tags: , , , ,

About the Author

specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Tina’s articles are reposted frequently on Reuters, Scientific American, and many other sites. Views expressed are her own. Follow her on Twitter @TinaMCasey and Google+.

Back to Top ↑